Key Highlights:
Total Fee-related AUM[1],[2] increased 2.7% year-on-year to US$80 billion
US$2.3 billion of new capital raised in 1H FY2024, up 155% on the same period last year
ESR positioning for next phase of growth through ongoing balance sheet optimisation, streamlining and simplifying business, and the successful early LOGOS rollup and integration
Fully integrated ESR and LOGOS creates a highly scalable real asset platform, cementing ESR's New Economy leadership in APAC
Fast-growing APAC Data Centre platform with an over two-gigawatt strong pipeline of land and projects identified to capitalise on robust digital infrastructure demand driven by the rapid rise of AI with a differentiated value proposition
HONG KONG, Aug. 21, 2024 /PRNewswire/ -- ESR Group Limited ("ESR" or the "Company", together with its subsidiaries as the "Group"; SEHK Stock Code: 1821), Asia-Pacific's ("APAC") leading New Economy real asset manager, today announced its results for the six months ended 30 June 2024 ("1H FY2024").
Despite the challenging environment that has persisted since the beginning of 2024, ESR is making steady progress in its key business priorities of ongoing balance sheet optimisation, streamlining and simplifying its business, and completing its business integration with LOGOS, to set up the Group for the next phase of growth across its Logistics, Data Centres, and Infrastructure and Energy Transition platforms.
ESR continued to make progress on its asset-light strategies and is on track to complete its announced US$1.2 billion worth of asset syndications and non-core divestments (in gross value). The Group's accelerated capital recycling efforts are evidenced in the potential listing of ESR China REIT in 2H FY2024. Additional balance sheet asset pipeline divestments are in active execution, primarily in Greater China and Japan.
With a clear focus on New Economy opportunities to fuel its next phase of growth, ESR has made significant progress in streamlining and simplifying its business. Nearly half of the firm's targeted US$750 million divestments of non-core assets will be completed within FY2024. The Group has fully divested its interest in ARA US Hospitality Trust and manager and aims to close the sale of the ARA Private Fund business imminently. The targeted remaining non-core divestments have been identified and are in progress.
The Group also accelerated the founder rollup and full integration of LOGOS from its original January 2025 target, enabling the combined Group to capitalise on the benefits of a fully integrated platform, including targeting revenue opportunities and cost synergies across the Group. The combined entity will strengthen ESR's New Economy leadership position in key APAC markets with a combined New Economy AUM of US$72 billion and bring together the complementary Data Centre and Infrastructure businesses, which are key growth drivers of the Group.
Jeffrey Shen and Stuart Gibson, ESR Group Co-Founder and Co-CEO, said, "The ongoing and focused execution of our stated strategy has positioned the Group to navigate the continued uncertainty and set it up well as rates likely come down and transaction activity rebounds. We have made significant progress in our key business priorities and expect this to start to deliver results as the market turns more positive. Our Fund Management business continues to perform, underscoring the consistent quality and appeal of our assets for investors, the region's largest development workbook, and our best-in-class localised teams."
"On the back of outsized Artificial Intelligence ("AI") demand that is quickly migrating to APAC, we are accelerating our data centre rollout to capitalise on the unprecedented demand for high-performing digital infrastructure in the region. We are confident that APAC's growth trajectory will follow that of more mature markets like the U.S., given the region's huge unmet data centre demand and rapid technology adoption. We are primed to further scale our business and deliver on our growth strategies as the anticipated interest rate cuts spur a substantial rebound in capital partner activity," Jeffrey and Stuart added.
Philip Pearce, Deputy CEO of ESR Group and CEO of ESR Australia & New Zealand ("ANZ"), said, "The successful early integration with LOGOS creates a highly scalable platform which not only allows us to unlock additional revenue and cost synergies, but also positions ESR in the strongest position to capitalise on the next phase of growth. As we look to the next five years, the APAC region is poised to account for nearly 30% of the global data centre capacity expansion. This is reminiscent of the significant surge of e-commerce that reshaped the logistics sector a decade ago, and I am optimistic about the extraordinary opportunities this presents for ESR."
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